general standard procedures for biennial independent ......cc: karen majcher, vice president high...

14450 Burnhaven Drive Burnsville, Minnesota 55306

April 8, 2015 Ms. Patricia Van Gerpen Executive Director South Dakota Public Utilities Commission Capitol Building – 1st Floor 500 East Capitol Avenue Pierre, South Dakota 57501-50570 Re: Lifeline Biennial Audit – Report of Independent Accountants on Applying Agreed-Upon

Procedures Dear Ms. Van Gerpen: Pursuant to the General Standard Procedures for Biennial Independent Audits Required Under the Lifeline Reform Order1, Frontier Communications Corporation hereby provides you with a copy of the attached Report of Independent Accountants on Applying Agreed-Upon Procedures.

If you have any questions, please contact Christine Burke at 585-777-6719 or by e-mail at [email protected] Respectfully submitted,

Stephen H. Hegdal Manager – Compliance and Reporting Attachments cc: Scott Bohler, Frontier 1 See Wireline Competition Bureau Announces Release of Final Lifeline Biennial Audit Plan, Public Notice, 29 FCC Rcd 3568 (rel. Apr. 2.2014) DA 14-450

mailto:[email protected]

April 2, 2015

Charles Tyler

Telecommunications Access Policy Division

Wireline Competition Bureau,

445 12th Street, SW, Room 5-A452

Washington, DC 20554

[email protected]

Thomas Buckley

Office of the Managing Director

445 12th Street, SW, Room 1-A636,

Washington, DC 20554;

[email protected]

Via Electronic Mail

Re: Lifeline Biennial Audit – Report of Independent Accountants on Applying

Agreed-Upon Procedures

Pursuant to the General Standard Procedures for Biennial Independent Audits,1 Frontier Communications

submits the attached Report of Independent Accountants on Applying Agreed-Upon Procedures. Please

contact the undersigned with any questions.

Respectfully submitted,

Christine Burke

National Manager, Funding Programs

21 West Avenue

Spencerport, NY 14559

585-777-6719

[email protected]

Attachment

cc: Karen Majcher, Vice President High Cost & Low Income Division, USAC

Sara Yocum, Moss Adams

1 See Wireline Competition Bureau Announces Release Of Final Lifeline Biennial Audit Plan, Public

Notice, 29 FCC Rcd 3568 (rel. Apr. 2, 2014), Attachment 3 ¶¶ 5, 9.

Report of Independent Accountants on

Applying Agreed-Upon Procedures

Frontier Communications Corporation

December 31, 2013

1

REPORTOFINDEPENDENTACCOUNTANTSONAPPLYINGAGREED‐UPONPROCEDURES

To the Managements of Frontier Communications Corporation, the Universal Service AdministrativeCompany(USAC),andtheFederalCommunicationsCommission(FCCorCommission):Wehaveperformed theprocedures enumerated inAttachmentA,whichwere agreed toby theFCC’sWirelineCompetitionBureau(Bureau)andOfficeofManagingDirector(OMD) intheLifelineBiennialAudit Plan or as otherwise directed by the Bureau, solely to assist you in evaluating FrontierCommunications Corporation’s compliance with certain regulations and orders governing the LowIncome SupportMechanism (also known as the Lifeline Program) of the Universal Service Fund, setforthin47C.F.R.Part54,aswellasotherprogramrequirements,includinganystate‐mandatedLifelinerequirements(collectively, theRules)detailed intheLifelineBiennialAuditPlanforthecalendaryearended December 31, 2013. Frontier Communications Corporation’s management is responsible forcompliance with the Rules. This agreed‐upon procedures engagement was conducted in accordancewith attestation standards established by the Generally Accepted Government Auditing Standards(GAGAS) issued by the Government Accountability Office (2011 Revision). The sufficiency of theseprocedures is solely the responsibility of the Bureau and OMD. Consequently, we make norepresentation regarding the sufficiency of the procedures described in Attachment A either for thepurposeforwhichthisreporthasbeenrequestedorforanyotherpurpose.SpecificproceduresandrelatedresultsareenumeratedinAttachmentAtothisreport. Incompliancewith the Lifeline Biennial Audit Plan, this report does not contain any personally identifiableinformationorindividuallyidentifiablecustomerproprietarynetworkinformation.Wewere not engaged to, and did not, conduct an examination, the objective of whichwould be theexpression of an opinion on Frontier Communications Corporation’s compliance with the Rules.Accordingly, we do not express such an opinion. Had we performed additional procedures, othermattersmighthavecometoourattentionthatwouldhavebeenreportedtoyou.This report is intended solely for the information and use of the managements of FrontierCommunicationsCorporation,USAC,andtheFCC,andisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties.ThisreportbecomesamatterofthepublicrecorduponfilingofthefinalreportwiththeFCC.Thefinalreportisnotconfidential.Stockton,CaliforniaApril1,2015

Agreed-Upon Procedures Report – Attachment A Frontier Communications Corporation

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AttachmentAenumerates theagreed‐uponprocedures forFrontierCommunicationsCorporation, theassociatedresults,andanymanagementresponsesobtainedinrelationtotheexceptionsidentified.Objective1:CarrierObligationtoOfferLifelineProcedure1MossAdamsLLPinquiredofmanagementonDecember9,2014andobtainedthecarrier’spoliciesandproceduresinresponsetoItem4ofAppendixA(RequestedDocuments)oftheLifelineBiennialAuditPlanforofferingLifelineservicetoqualifyinglow‐incomeconsumers.Moss Adams LLP examined the carrier’s policies and procedures, and compared those policies andprocedures,aswellasmanagement’sresponsestotheinquiries,totheCommission’sLifelinerulessetforthinAppendixFoftheLifelineBiennialAuditPlan.MossAdamsLLPnotednodiscrepanciesbetweenthecarrier’spoliciesandprocedures,management’sresponses to the inquiries, and theCommission’sLifeline rules,except for thecarrier’snewcustomerscriptdoesnotidentifyLifelineasagovernmentassistanceprogramasrequiredundertheRulesper47C.F.R.Section54.405(c).BeneficiaryResponse:The phrase “government assistance” has been added to Frontier’s script used for new Lifelinesubscribers. Specifically, in the “New Customer” section, Frontier’s customer script has been editedfrom"WewanttomakeyouawareofourtelephoneassistanceprogramcalledLifelinethatisavailabletoqualifiedFrontiercustomersandprovidesdiscountedmonthlyratestoqualifiedcustomersbasedonincome qualification” to "We want to make you aware of a governmentassistance program calledLifeline that is available to qualified Frontier customers and provides discounted monthly rates toqualifiedcustomersbasedonincomequalification.”Inthe“Current/Non‐PayCustomer”section,Frontier’scustomerscripthasbeeneditedfrom"Wewantto make you aware of Lifeline, a telephone assistance program to encourage Frontier customers tomaintain their phone service” to "We want to make you aware of Lifeline, a government assistanceprogramtoencourageFrontiercustomerstomaintaintheirphoneservice.”Procedure2MossAdamsLLP inspected10examplesofcarriermarketingmaterialsdescribing theLifelineservice(i.e. print, audio, video and webmaterials used to describe or enroll in the Lifeline service offering,includingstandardscriptsusedwhenenrollingnewsubscribers,applicationandcertificationforms),asprovidedinresponsetoItems4,6,and7ofAppendixAoftheLifelineBiennialAuditPlan.MossAdamsLLPnotedone instancewheremarketingmaterials omitted requireddisclosures per 47C.F.R. Section 54.405(c), the Lifeline Scripting for new customers does not state that Lifeline is agovernmentassistanceprogramasrequiredbytheRules.


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BeneficiaryResponse:The one instance identified involved the customer script referenced in Procedure 1 above. As notedaboveintheBeneficiaryResponseforProcedure1,Frontier’sscriptfornewLifelineservicesubscribershasbeenrevisedtoreferenceLifelineasa“governmentassistance”program.Frontierhasrevieweditsother marketing materials promoting Lifeline service to confirm they reference Lifeline service as agovernmentassistanceprogram.Procedure3MossAdamsLLPwasunabletoinspect10randomlyselectedrecordedcallsoutofthe50recordedcallsservicingtheEligibleTelecommunicationsCarrier's(ETC)Lifelinesubscribers,asprovidedinresponsetoItem8ofAppendixA,astherewerenorecordedcustomercallsavailablefortheengagementperiod.BeneficiaryResponse:Frontier’spolicyistorecordcustomerservicecallsreceivedinitscustomercarecentersandtoretainthoserecordedservicecallsforaperiodofapproximately90days.Frontier’ssystemsdonotsegregateand separately retain customer call recordings inwhichLifeline service is discussedwitha customerfrom other customer service calls (e.g. billing questions). Frontier is not aware of any requirementundertheapplicablestatutesandFCCrulestorecordcustomercallsandretainarecordofthosecallsrelated to Lifeline inquiries and service issues. Frontier further notes that customer service calls inwhichLifelineavailabilityisdiscussedwitheligiblecustomersisonlyapartofFrontier’soverallLifelineoutreachandmarketingefforts.DocumentationrelatedtootherLifelineoutreachandmarketingeffortsareretained. Procedure4Moss Adams LLP inspected applicable policies and procedures regarding de‐enrollment from theprogramwhentheETCde‐enrollssubscribersbasedonlackofeligibility,duplicatesupport,non‐usage,andfailuretorecertify.MossAdamsLLPinspectedpoliciesandproceduresforde‐enrollmentwheretheETChadinformationindicatingthataLifelinesubscribernolongermetthecriteriatobeconsideredaqualifyinglow‐incomeconsumerunder47C.F.R.Section54.409,asprovidedinresponsetoItem4ofAppendixA.Moss Adams LLP noted the policies and procedures included, but were not limited to: (1) notifyingsubscriber of impending termination of service; (2) allowing subscriber to demonstrate continuedeligibility;and(3)terminatingofserviceforfailuretodemonstrateeligibility,andtherewerenoareasthatwerenotincompliancewith47C.F.R.Section54.405(e)(1)oftheCommission’srules.MossAdamsLLP inspected the carrier’spolicies andprocedures forde‐enrolling subscribers that arereceiving Lifeline service from another ETC or where more than one member of a subscriber’shouseholdisreceivingLifelineservice(duplicativesupport).MossAdamsLLPnotedthepoliciesandproceduresstatedthattheETCwillde‐enrollsubscriberswithinfive business days of receiving notification from USAC programmanagement that a subscriber or asubscriber’s household is receiving duplicative Lifeline support, as required by 47 C.F.R. Section54.405(e)(2)oftheCommission’srules.


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MossAdamsLLPnotedtheETCassessesorcollectsamonthly fee fromitssubscribers.Assuch,MossAdams LLP did not inspect the carrier’s policy and procedures for de‐enrolling subscribers for non‐usage(i.e.,whereaLifelinesubscriberfailstouseLifelineservicefor60consecutivedays)as47C.F.R.Section54.405(e)(3)and/or54.407(c)(2)donotapply.MossAdamsLLPreviewedthecarrier’spolicyandproceduresforde‐enrollingaLifelinesubscriberthatdoes not respond to the carrier’s attempts to obtain recertification, as part of the annual eligibilityrecertificationprocess.Moss Adams LLP examined the carrier’s policies and procedures and compared those policies andprocedures,aswellasmanagement’sresponsestotheinquiries,totheCommission’sLifelinerulessetforthinAppendixFoftheLifelineBiennialAuditPlan.MossAdamsLLPnotednodiscrepanciesbetweenthecarrier’spoliciesandprocedures,management’sresponsestotheinquiries,andtheCommission’sLifelinerulesper47C.F.R.Section54.405(e)(4).MossAdamsLLPinspectedthesamplednoticeofimpendingde‐enrollmentletters(ortemplatesinlieuof individual requests) and verified that the communications explain that the subscriber has 30daysfollowingthedateofthenoticeofimpendingde‐enrollmentlettertodemonstratecontinuedeligibilityorthecarrierwillterminatethesubscriber’sLifelineservice.MossAdamsLLPnotednoinstanceswherede‐enrollmentlettersdidnotincludeanexplanationthatthesubscriber has 30 days following the date of the notice of impending de‐enrollment letter todemonstrate continued eligibility or the carrierwill terminate the subscriber’s Lifeline service.MossAdamsLLPreviewedthede‐enrollmentletters(ortemplatesinlieuofindividualrequests),otherformsof communications,and thecarrier’s responses to thebackgroundquestionnaireandverified that thede‐enrollmentlettersweresentbyamethodseparatefromthesubscriber’sbill.Moss Adams LLP noted no instances where the de‐enrollment letters were not sent by a methodseparatefromthesubscriber’sbill.MossAdamsLLPnotedoneinstancewheretheETCdidnotprovidetherequestedde‐enrollmentletter(or recertification in lieu of de‐enrollment letters) in violation of the documentation retentionrequirementsper47C.F.R.Section54.417(a).MossAdamsLLPattachedacopyoffiveexamplesofrecertificationlettersofindividualrequestsasanexampleofrecertificationprovidedtothesubscriber.SeeAttachmentBattached.BeneficiaryResponse:Frontierhasreviewedtheoneinstancewhereitdidnotprovidetherequestedde‐enrollmentletter(orrecertification in lieu of a de‐enrollment letter) and has determined that Frontier suspended thesubscriber’s account for non‐payment during the recertification period and the subscriber was thendisconnectedfornon‐payment.


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ObjectiveII:ConsumerQualificationforLifelineProcedure1MossAdamsLLPinquiredofmanagementonDecember9,2014andobtainedthecarrier’spoliciesandproceduresinresponsetoItem4ofAppendixA(RequestedDocuments)oftheLifelineBiennialAuditPlanforlimitingLifelinesupporttoasinglesubscriptionperhousehold.Moss Adams LLP examined the carrier’s policies and procedures and compared those policies andprocedures,aswellasmanagement’sresponsestotheinquiries,totheCommission’sLifelinerulessetforthin54.409(c)(AppendixF)oftheLifelineBiennialAuditPlan.MossAdamsLLPnotednodiscrepanciesbetweenthecarrier’spoliciesandprocedures,management’sresponsestotheinquiries,andtheCommission’sLifelinerules.Noexceptionsnoted.Procedure2MossAdamsLLP inquiredofmanagementonDecember9,2014andreviewedprocedures thecarrierhadinplacetoensure itaccuratelycompletedtheFCCForm497.Thepolicyandprocedures includedthefollowing:

ThepositiontitleofthepersonresponsibleforobtainingdatafortheFCCForm497; TheprocessfordeterminingwhichsubscribersshouldbeincludedmonthlyintheFCCForm497.

Verifytheproceduresincludecut‐offandbillingcycledates,andonlythosesubscribersactiveasofthestartorendofthemonth;

ThatacorporateofficersignatureisrequiredfortheFCCForm497; Thataverificationprocessexiststoperformanindependentreview;thatis,thepersonreviewing

orvalidatingtheform’sdataisdifferentfromthepersoncompletingtheform;and

Providesthebillingsystemnameusedtogeneratecompletionoftheform.Moss Adams LLP noted the written policies and procedures, background questionnaire response,internalcontrolquestionnaireresponses,andETCmanagement’sresponsesconflictwiththeRulesper47C.F.R.Section54.407(a)(b)(e)inthattheindividualresponsibleforsigningtheForm497forpartof2013wasnotanofficerofthecompany.BeneficiaryResponse:FrontierwillensurethatanappropriatecompanyrepresentativesignstheForm497. Procedure3MossAdamsLLPobtained the Subscriber List in response to Item1 ofAppendixA andobtained thecarrier’sFCCForm497(s)foreachstudyareaforIndiana,NewYork,andOhio.MossAdamsLLPexaminedthenumberofsubscribersclaimedontheForm(s)497foreachstudyareainIndiana,NewYork,andOhioandcomparedthenumberofsubscribersreportedontheForm497tothenumberofsubscriberscontainedontheSubscriberListforeachstudyarea.Moss Adams noted the number of subscribers reported on the Form 497 agreed to the number ofsubscriberscontainedintheSubscriberList.Noexceptionsnoted.


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Procedure4MossAdamsLLPusedcomputer‐assistedaudittechniquestoexaminetheSubscriberList,providedinresponsetoItem1ofAppendixA,forduplicateaddresseswithdifferentsubscribers.MossAdamsLLPnotedduplicateaddresseswithdifferentsubscribersexisted.Procedure5MossAdamsLLPrandomlyselected30subscribersfromthelistofduplicatesandrequestedcopiesofthe one‐per‐household certification form for each of the selected subscribers to verify the selectedsubscribercertifiedtoonlyreceivingoneLifeline‐supportedserviceinhis/herhousehold.MossAdamsLLPnotedtherewere16missingand0incompletecertifications.MossAdamsLLPnoted11 instanceswheretheETCdidnotprovidetherequestedone‐per‐householdworksheets,and5instanceswheretheETCdidnotprovidethecertification/recertificationformsiftheETC uses these forms in lieu of one‐per‐household worksheets, in violation of the documentationretentionrequirementsper47C.F.R.Section54.417(a).BeneficiaryResponse:FrontierpersonnelresponsibleforadministeringLifelinearetrainedtorequestadditionalinformationfromsubscribers, includingtheone‐per‐householdworksheetsininstanceswherethereappearstobeduplicate addresses. Of the eleven instances referenced in the findings where a missing householdworksheet was not located, Frontier has identified the following information related to five of thesubscribers:

Threesubscribersweredisconnectedin2013forfailingtorecertifyorforsubmittinganinvalidrecertification

Onesubscriberprovidedahouseholdworksheetaftertheaudit Onesubscriberaddressapartmentnumberwaschangedaftertheauditrenderingthehousehold

nolongerduplicateOf the five instances referenced in the findings where Frontier was unable to initially providecertification/recertificationformsinlieuofhouseholdworksheet,FrontierremovedLifelineserviceforthree subscribers between March and August 2013 because recertification documentation was notreceivedbythecompany.Further, Frontier has enhanced its processes for eliminating duplicate subscribers and collecting andretaining the Lifeline HouseholdWorksheet to remove duplicate subscribers. In 2014, the NationalLifelineAccountabilityDatabase(NLAD)wasutilizedbyFrontiertoremoveduplicatesubscribersatthesame address. Mailings, which included a household worksheet, where appropriate, were sent tosubscribers with duplicate addresses. Those Lifeline subscribers who did not respond with a validhouseholdworksheetwereremovedfromtheLifelineprogrambyFrontier.


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ObjectiveIII:SubscriberEligibilityDeterminationandCertificationProcedure1MossAdamsLLPinquiredofmanagementonDecember9,2014andobtainedthecarrier’spoliciesandproceduresinresponsetoItem4ofAppendixA(RequestedDocuments)oftheLifelineBiennialAuditPlanforensuringthatitsLifelinesubscribersareeligibletoreceiveLifelineservices.Moss Adams LLP examined the carrier’s policies and procedures and compared those policies andprocedures,aswellasmanagement’sresponsestotheinquiries,totheCommission’sLifelinerulessetforthin54.410oftheLifelineBiennialAuditPlan.MossAdamsLLPinspectedtheETC’spoliciesandnotedevidenceofaverbalpolicyindicatingtheETCdoesnotretaincopiesofsubscribers’proofofincome‐orprogram‐basedeligibility.MossAdamsLLP inspected theETC’spolicies andnotedevidenceofpolicies andprocedures that theETCmustfullyverifytheeligibilityofeachlow‐incomeconsumerpriortoprovidingLifelineservicetotheconsumer, and that theETCor itsagentsmaynotprovide theconsumerwithanactivateddeviceintendedtoenableaccesstoLifelineserviceuntilthatconsumer’seligibilityisfullyverifiedandallothernecessaryenrollmentstepshavebeencompleted.MossAdamsLLPnotednodiscrepanciesbetweenthecarrier’spoliciesandprocedures,management’sresponsestotheinquiries,andtheCommission’sLifelinerules.Noexceptionsnoted.Procedure2Moss Adams LLP examined the ETC’s policies and procedures for training employees and agents forensuring that the ETC’s Lifeline subscribers are eligible to receive Lifeline services, including anypoliciesregardinghowthecompanyensuresemployeesandagentshavecompletedthetraining.Moss Adams reviewed documentation and conducted a verbal interview with the ETC to ensureemployeesandagentsaretrainedforsubscribereligibilityforLifelineservicesincludingcompletionofnecessaryforms.TheETCindicatedduringaverbalinterviewonDecember9,2014thatnewcustomer‐facing employees are given one week of training, during an eight week training course, regardingLifeline rules and completion of necessary forms. The ETC identified a dedicated lead trainer isresponsibleforensuringnewandcurrentemployeesareproperlytrained.TheETCprovidedevidenceoftrainingthroughitsowninternallogsthatidentifiedpersonnelanddatesoftraining.InadditiontheETCfurtherprovidedsubsequentLifelinefollowuptrainingasidentifiedinAppendixCsupportingitscompliancewithLifelinetrainingandconducted28internalconferencecallstodiscussprocess,issues,and rules of Lifeline. The ETC provided supporting documentation including a sample trainingexaminationthatincludedLifelineeligibilityquestions.TheETCindicatedthatduringtestyear2013ithadnotutilizedNLADforverification,astheNLADprocesswasnotimplementeduntil2014.However,theETCdidparticipate inUSAC/NLADwebinarson6occasionsduring2013. TheETChas indicatedthatbeginning2014 ithassubsequently trainedemployeesonuseand interactionandhaspolicies inplacetolimitaccesstoNLAD.TherearenofindingsandETChasdemonstrateditscompliancewithFCCCommissionRulesassetforthinsetforthin47C.F.R.§§54.409and54.410.


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Procedure3MossAdamsLLPrandomlyselected100subscribers from the subscriber listprovided in response toItem1ofAppendixA,andtestedthesubscriber’scertificationandrecertificationformsforinformationlistedinObjectiveIIIProcedure3.MossAdamsLLPexaminedthesubscribercertificationandrecertificationformsnotingthefollowing:TheETCdidnotprovidethesubscribercertificationforms,subscriberrecertificationforms,and/orthedatasource theETCreviewed toconfirmthesubscriber’seligibility inviolationof thedocumentationretentionrequirementsper47C.F.R.Section54.417(a)for20ofthe100subscriberssampled.TheETCdidnotrequirethesubscribertocertify,underpenaltyofperjury,thatthesubscriberisseekingto qualify for Lifeline as an eligible resident of Tribal lands,when he or she lives on Tribal lands, asdefinedin47C.F.R.Section54.400(e).No subscribers receivedTribal LifelineProgram support, and therefore subscribers didnot certify toresidingonTriballands.TheETCdidnotrequire that thesubscriberacknowledges that thesubscribermayberequired tore‐certifyhisorhercontinuedeligibilityforLifelineatanytime,andthesubscriber'sfailuretore‐certifyastohis orher continuedeligibilitywill result inde‐enrollment and the terminationof the subscriber'sLifelinebenefitspursuantto47C.F.R.Section54.405(e)(4)in12instances.The subscriber certificationand/or recertification formsdid containall theelements requiredper47C.F.R.Section54.410.Thefederaleligibilitycriterialistedontheformsareconsistentwiththefederaleligibilitycriteriaper47C.F.R.Section54.409.Thesubscriberdidnotcompleteallrequiredelementsontheformfor10of100subscriberssampled.Thesubscriber’sinitialcertificationformwasnotprovidedin42of100subscriberssampledinviolationof document retention rules under 47 C.F.R. Section 54.417(a); thereforeMoss Adams LLP could notverifythattheformwasdatedbeforethesubscriber'sLifelinestartdate.MossAdamsLLPreviewedthelistofthedatasourceordocumentationreviewedbytheETCtoconfirmthesubscriber’seligibilityandverifiedtherecordeddatasourceswereeligibledatasourcesper47C.F.R.Section54.410, suchas (1) incomeorprogrameligibilitydatabases, (2) incomeorprogrameligibilitydocumentation,or(3)confirmationfromastateadministrator.MossAdamsLLPnotedthedatasourcereviewedtoconfirmthesubscriber’seligibilitywasaneligibledatasourceper47C.F.R.Section54.410for83of100subscriberssampled.MossAdamsLLPnoted17instanceswheretheETCdidnotprovidethedatasourceordocumentationtheETCreviewedtoconfirmthesubscriber’seligibilityinviolationofdocumentretentionrulesunder47C.F.R.Section54.417(a).


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BeneficiaryResponse:With respect to the findings related to Frontier’s inability to provide copies of the underlyingdocumentation requests, Frontierwill enhance its recordkeeping processes, including augmenting itstrainingtoemphasizetheimportanceofobtainingandaccuratelyscanningandclassifyingandretainingsubscriberLifelineformsitreceivesandenhancingitssystemcapabilitiestofacilitatereview,retrievalandretentionof theunderlyingLifelinedocumentation. Frontierwill alsoenhance itsquality controlprocess to improveoversightofandcompliance, includingaugmenting its trainingand increasing thepercentage of forms audited to ensure accuracy and completeness of the application forms and theretrievalandretentionofLifelineapplicationforms,recertificationformsandotherdocumentation.With respect to the finding that Frontier did not require that the subscriber acknowledges that thesubscribermayberequiredtore‐certifyhisorhercontinuedeligibilityforLifelineatanytime,Frontiernotes that all twelve instances referenced in the finding where the words “or as requested” wereomitted from the form resulted from a single document ‐ the 2013 version of Frontier’s New YorkLifelineapplication.TheomittedwordingwascorrectedinFebruary2014,priortotheinitiationofthisaudit, as part of the Frontier annual review of Lifeline application documents. Frontier updated theapplication forms at that time to add the verbiage “or as requested” to the sentence “Frontier hasexplainedtomethatIamrequiredeachyear(orasrequested)torecertifymycontinuedeligibilityforLifeline.”Oftheteninstancesreferencedinthefindinginwhichthesubscriberfailedtofillinoneelementoftheform, in five instances the subscriber completed the entirety of the form except to check one of thefollowingtypesofaddressboxes:Is this address ☐ Permanent ☐ Temporary ☐ Multi‐Household.With respect to the finding involving seventeen instances where Frontier did not provide the datasource or documentation reviewed to confirm the subscriber’s eligibility Frontier notes that itsprocessesandproceduresrequirethoseadministeringtheLifelineprogramtoobtainproofofeligibilityandtonoteitintheaccount.Thefactthatanaccountisnotnotedinaccordancewiththisprocessdoesnotnecessarilymeanthatsatisfactoryproofofeligibilitywasnotreceivedandreviewedbut indicatesthat the Company may have not notated the account in accordance with its procedures. With theimplementation of the National Lifeline Accountability Database in 2014, eligibility codes have beenimplementedwhichidentifythesourceofeligibilityonthesubscriberaccount.TheseventeeninstancesnotedweredisconnectedfromLifelinebeforethenewcodeswereimplemented.Further,Frontierhasenhanceditsprocessestoincludeaweeklyinternalreviewofsubscriberaccounts.The review checks for subscriber accounts receiving a Lifeline discount through the service andequipmentcodeandvalidatesthattheeligibilitycodeisalsoincluded.Additionally,thereviewchecksother markers including service type and credit class. Subscriber accounts that do not contain allrequired Lifelinemarkers are referred to Frontier’s Offline Customer Service department for review.Personnel in this department validate documentation, customer eligibility and make appropriateupdatestosubscriberaccounts.


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ObjectiveIV:AnnualCertificationsandRecordkeepingbyEligibleTelecommunicationsCarriersProcedure1MossAdamsLLPinquiredofmanagementonDecember9,2014andobtainedthecarrier’spoliciesandproceduresinresponsetoItem12ofAppendixA(RequestedDocuments)oftheLifelineBiennialAuditPlanforensuringthatthecarrierhasmadeandsubmittedtheannualcertificationsrequired.Moss Adams LLP examined the carrier’s policies and procedures, and compared those policies andprocedures,aswellasmanagement’sresponsestotheinquiries,totheCommission’sLifelinerulessetforthin54.416and54.522oftheLifelineBiennialAuditPlan.MossAdamsLLPnotednodiscrepanciesbetweenthecarrier’spoliciesandprocedures,management’sresponsestotheinquiries,andtheCommission’sLifelinerules.Noexceptionsnoted.Procedure2Moss Adams LLP examined the ETC’s FCC Form 555 that was filed in January 2014 and verified anofficeroftheETCcertifiedthattheyunderstoodtheCommission’sLifelinerulesandrequirementsandthatthecarrier:hadpoliciesandproceduresinplacetoensurethatitsLifelinesubscriberswereeligibleto receive Lifeline services; is in compliancewith all federal Lifeline certification procedures; and ininstanceswheretheETCconfirmedconsumereligibilitybyrelyingonincomeoreligibilitydatabases,asdefinedin47C.F.R.Section54.410(b)(1)(i)(A)or(c)(1)(i)(A),therepresentativemustattestannuallyastowhatspecificdatasourcestheETCusedtoconfirmeligibility.MossAdamsLLPnotednoinstanceswherecertificationswerenotmade.Noexceptionsnoted.Procedure3MossAdamsLLPexaminedtheETC’sorganizationalchartprovidedinresponsetoItem5ofAppendixAandverified thecertifyingofficeron theFCCForm555wasanofficerper theorganizational chartorotherpubliclyavailabledocument.MossAdamsLLPnotedtheindividualwhocertifiedtheFCCform555wasdesignatedasanofficerpertheorganizationalcharttosigntheFCCForm555.Noexceptionsnoted.Procedure4Moss Adams LLP verified that the subscriber count per the FCC Form 555 agreed with the totalsubscribercountpertheFebruaryForm497afterallstudyareasweretotaled.MossAdamsLLPnotednodiscrepanciesbetweenthesubscribercountpertheFCCForm555,columnAandthesubscribercountpertheFebruaryFCCForm(s)497for2013.Noexceptionsnoted.


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Procedure5MossAdamsLLPrandomlyselectedoneof the three statesor territorieswhere theETCreceived thelargestamountofLifelinesupportandtwoadditionalstatesorterritorieswheretheETCisresponsiblefortheannualrecertificationprocess.MossAdamsLLPreviewedtheETC’srecertificationresultsoftheindividualsubscribersreportedontheFCCForm555filedinJanuary2014forthosethreerandomlyselectedstates,asprovidedinItem9ofAppendixA,andverifiedthatthedatareportedontheFCCForm555forthosestatesagreedwiththedetailedrecertificationresults.MossAdamsLLPnotednodiscrepanciesbetweentheFCCForm555 for thosestatesand thedetailedrecertificationresults.Noexceptionsnoted.Procedure6MossAdamsLLPnotedthenon‐usageruledoesnotapplytotheETC,andtherefore,didnotrandomlyselect three months during the audit period, one of the three states or territories where the ETCreceivedthelargestamountofLifelinesupport,andtwoadditionalstatesorterritorieswheretheETCreceives Lifeline support, and did not review the ETC’s detailed non‐usage results of the individualsubscribers reported on the FCC Form555 for those three randomly selectedmonthswith the threeselectedstates,asprovidedinItem10ofAppendixA(Non‐UsageSample).Procedure7MossAdamsLLPreviewedthecarrier’sannualETCcertification,asprovidedinItem13ofAppendixA,and verified that theETC reported all the information andmade all the certifications requiredby47C.F.R.Section54.422(a)(b).Moss Adams LLP noted no discrepancies between the information reported, certificationsmade, andthoserequiredbytheCommission’sLifelinerules.Noexceptionsnoted.Procedure8MossAdamsLLPreviewedthesupportingschedulesrelatedtothecarrier’sannualETCcertification,asprovidedinItem13ofAppendixA,andverifiedthatthedatareportedontheannualETCcertificationsagreedwithsupportingschedules.Moss Adams LLP noted no discrepancies between the annual ETC certification and the supportingschedules.Noexceptionsnoted.


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Procedure9MossAdamsLLPinquiredofmanagementonDecember9,2014andobtainedthecarrier’spoliciesandprocedures for maintaining records that document compliance with the Lifeline program rules, asprovidedbythecarrierinresponsetoItem4ofAppendixA.Moss Adams LLP examined the carrier’s policies and procedures, and compared those policies andprocedures,aswellasmanagement’sresponsestotheinquiries,totherecordkeepingrulessetforthin47C.F.R.Section54.417(a).MossAdamsLLPnotednodiscrepanciesbetweenthecarrier’spoliciesandprocedures,management’sresponsestotheinquiries,andtheCommission’sLifelinerules.Noexceptionsnoted.

Agreed‐UponProceduresReport–AttachmentB FrontierCommunicationsCorporation